Wednesday, September 26, 2012

Obviously we will see some kind of a rebound tomorrow even the intermediate term trend is about to turn down.

50 day cycle just gave a sell signal.

Dax McClellan Summation Index already made a negative divergence with the underlying index. Currently it is heading down.

It is highly probable that Dax will fall at least below 7200, and then appropriate short term target could be found from a weekly chart. So far Fibonacci level 7037 seems to be enough, maybe even below 7000.

Thursday, September 13, 2012

Will we see all time high soon? The chart is beginning to give an indication of higher high level if the rest of the week continues to advance. Currently we are trying to break above 7400, which would lead to 8000.

McClellan Summation Index indicates that the trend is up.

50 day cycle indicates that the trend is up.

I would like to see 100% of Dax stocks abobe their 50 day moving average before intermediate term topping process.

Only concern is that the current shorter term risk cycle isn't behaving normally, although the current situation isn't normal either. Anyway, market has been pricing QE3 for a while and when we got it, Dax could pullback soon -2-5 %.

Friday, August 24, 2012

Dax seems to turn on the bears side. Closing below declining trend line isn't good in this situation. On a weekly chart Dax 6594 seems to be the downside target. Stochastics indicator already gave us a sell sign.

Short term trend is down according to risk behavior. This could mean few down days, then followed by a rebound and then more down.

Longer term trend indicator also gave us a sell sign.

The mood became bearish, so let's see if there will be some kind of a topping process or a pullback. September has, by the way, been one of the most bearish months in a year. A healthy pullback and Fed announcement of QE3 seems to be the name of the game.

Friday, August 17, 2012

Dax finished the week above the declining trend line, which we have been watching closely. Stochastics is indicating overbought condition which is not yet a selling sign. The condition could easily last 1-10 weeks.

On a daily basis, technical break-out above the longer term declining trend line was strong and without volume surge. Therefore the break out should not be treated an exhaustion and we will see higher high during next week.

It is expected that all the Dax stocks would climb above their 50 day moving average before intermediate term market top.

McClellan Summation Index is in a strong uptrend.

Risk behavior has been declining even the index has been rising, so risk appetite should grow next week and lead stocks higher.

Stocks are highly correlated, so the investors haven't been picking the "right" stocks but only following the market trend.

It is obvious that Dax is trying to reach above March high and above 7200.

Monday, August 6, 2012

On a weekly candles Dax is soon approaching it's major resistance near 7000 where lies a declining trend line drawn from last year's peak. Additionally, stochastics is indicating an overbought condition. If the market wants to stay positive we could consolidate at these levels or at least the upside potential should be limited?

Thursday, July 26, 2012

Technical indicators are currently a little bit bearish. MACD lines have crossed downwards and RSI reading is below 50. However, 200 days moving average has served as a support during whole July. 6544 Fibonacci level broke down violently and even Dax is flirting with it's SMA(200) we can still expect 6242 level to be touched.

Shorter term cycle indicator is down and investors are getting rid of riskier assets and stocks.

McClellan Summation Index is also pointing down.

50 day cycle indicator lines also crossed downwards and normally this has meant more down ahead.

Thursday, July 19, 2012

It is highly probable that we will see some kind of consolidation during next 1-5 days. Investors have been chasing high beta so intensively, that the risk cycle has already been topping and thus not letting much room for the upside.

Tuesday, June 5, 2012

Looks like the turning point is in hands at the moment. Trading signals already suggest to abandon all short positions and to take long positions for DAX, CBK, HEID, DBK, FRE, SAP, ALV, ADS. Looks like the direction will be up and we will soon accelerate full speed ahead.

Friday, May 25, 2012

According to indicators, we have a little evidence of reliable market bottom yet. So far the trading range of 6200-6400 has proven to be reliable. Dax hasn't yet touched it's 200 days moving average which is holding the key level near 6200. It is highly expected that we could at least visit 6150-6180 before forming any reliable (tradable) market bottom.

Monday, May 21, 2012

The market is acting as expected. Let's watch this rebound if it is an intermediate term trend turn or just a bear market rally. Overbought and oversold condition is seemingly easening and indicating a nearing bottom. Anyway, Dax could rebound at least over 6400, perhaps 6544 is a decent target.

Saturday, May 19, 2012

Dax is flirting with the lower bottom of declining trend. Apparently, Fibonacci 50% and 200 days moving average should have their impact on forthcoming week. It could be reasonable to assume the trading range between 6200 - 6400.

Eur-usd rebounded from lower low which was should be very important support. Therefore, we can expect more rebound before testing the low again.

Some of the indicators still point down even the latest behavior of Volume index hasn't been exactly in unison compared to price index (Dax).

McClellan has been quite reliable and clear indicator to reveal longer trends.

Also Overbought and Oversold condition doesn't look like it would turn right now.

Risk behavior suggests that we could soon be nearing the bottom, and so far this indicator is at reasonable level compared to prices and we only need one single day to turn this indicator up.

We also need the high correlation level to lower first before any big trend change could happen.

Overview: The evidence shows that the intermediate term trend is still down, but there are some minor observations in the investor behavior that suggest some hesitation and at least short term rebound. The question remains if the rebound will also act as an intermediate term market bottom. The big question is whether the institutions and block traders shall join this sell-off, and thus driving the prices even lower, since now these major participants have stayed on the sidelines.

Friday, May 18, 2012

EUR-USD shouldn't fall below 1.26, HSI shouldn't fall below 18000. S&P500 already below 1300, DJI shouldn't fall below 12200. According to money flow of block trades, there hasn't been any major outflows made by big institutions, yet. So far they have managed to keep their nerves. Otherwise we will see more selling and bigger capitulation.

Hang Seng is breaking down below 38,2% Fibonacci and long term rising trend line. If the market cannot find any supports between 17.500-18.000 it is going to be a massacre. Obviously it is trying to head below 16.000...

Thursday, May 17, 2012

Watch out, rising correlation is one of the worst enemies of "modern" portfolio theory! Stock picking and diversification won't help your portfolio if the market wants to continue the current sell-off.

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